The Chocolate Cartel: the bitter taste left in farmers’ mouths

November 7, 2019

It’s delectable, delicious and makes us feel happy once consumed! Yes, it's chocolate of course, but the trade of the cocoa bean used to make this chocolate is a source of pain and exploitation for the farmers who produce this crop. 

 

The chocolate industry is a multi-billion-dollar industry, dominated by an oligopoly of a few major manufacturers from the United States of America (USA), United Kingdom (UK), Switzerland and Italy. These include major chocolate producing companies such as Mars Wrigley, Hershey Co (USA), Cadbury (UK), Nestlé (Switzerland) and Ferrero Group (Italy). These confectioner cartels have a significant amount of power, influence and control within the chocolate industry. On the opposite side of this, you have the farmers of major exporting cocoa bean states such as Côte d’Ivoire, Ghana, Nigeria, Indonesia and Ecuador who have weak bargaining power and are at the mercy of these major chocolate producers, and the global cocoa market.

 

The fair trade of cocoa beans is a major issue for all farmers around the world, as currently, the producers of chocolate hold too much power to determine the cost and profit of cocoa beans and chocolate. For example, Côte d’Ivoire which is the largest producer of cocoa with almost 40% of the world's cocoa bean production, and 65% of the world’s highest quality cocoa. Many farmers have never ever tasted what their cocoa bean tastes like in chocolate because they cannot afford too. The major issue with the trade of the cocoa bean is not the share of the market for each producing nation, but the fair price paid to farmers for producing the cocoa. Cocoa is an extremely labor intensive and sensitive crop which requires a lot of attention and input, and cannot be farmed in a large commercial manner, as this would dramatically decrease yield and quality. The cocoa tree and beans are incredibly sensitive. The crop must be planted in tropical rainy areas, within 20 degrees of latitude from the equator, the tree must be surrounded by shading trees as it must not have too much sunlight. Additionally, it grows in a band of tropical temperatures between 20-35 degrees with humidity levels of around 50-7%. Thee added sensitivities includes the removal cocoa pods which contain the beans, which needs to be done precisely and gently as not to hurt the branches, as well as the fact that cocoa trees need to be replaced and replanted after 20-25 years, as their yield decreases with the age of the tree. The tree is highly susceptible to being eaten by animals and subject to disease, so additional fruit plants need to be planted as countermeasures.

 

As a result of deregulation, neoliberal laissez-faire economic principles and free trading under World Trade Organisation (WTO) rules, power has increasingly shifted to the hands of chocolate manufacturers. These chocolate cartels have too much power and influence on the trade of cocoa. This increased power has resulted in chocolate manufactures controlling entire supply chains and wrestling any influence away from farmers. Chocolate manufactures are also known to speculate on markets to affect the price of cocoa beans. This allows them to maximise profits and buy from sellers at the lowest possible price. A perfect example of this erratic fluctuation of cocoa bean prices as a commodity on the international market is the current trading price at $1835 per tonne, but rewind 9 months to October 2018 and it was trading at $1463 which is a 20.4% change. Furthermore, the 2003 documentary “The Dark-Side of Chocolate” highlighted another major issue within the trade of cocoa, that being the use of child slavery to harvest the beans. In attempting to maximise their profits due to fluctuations in international cocoa bean prices, as well as poor socio-economic conditions within their countries, farmers have utilised cheap child labor to help with the harvest of cocoa. It’s estimated that over 1 million children are employed in cocoa fields all over Côte d’Ivoire, Ghana and Ecuador. Major companies have committed to agreements such as the Harkin–Engel Protocol which aims to outlaw such practices, but child labor is still a common occurrence in cocoa fields as farmers attempt to reduce cost and maximise profit.

 

However, farmers of these nations are trying to fight back through cooperatives and unionised system which can demand better pay for their produce. The establishment of the fair-trade price cocoa which guarantees farmers a fair price for their cocoa beans regardless of international price has been a step in the right direction. The price is set at $1850 per ton with an added premium on top which contributes to a common farmers fund which helps fund research and additional cost associated with cocoa farming. This fair-trade price means farmers will at least receive a decent wage regardless of global market prices and help them attain a better quality of life. However, the industry remains problematic, as the fair-trade cocoa beans only constitute 5% of the global market, with major companies like Cadbury and Nestlé only committing to 20% of its global cocoa being fair-trade. More needs to be done to address the issues of the trade of cocoa beans, there needs to be more support from governments for their farmers, as well as stronger collective voice from the farmers as well. Additionally, we as consumers need to be made more aware of the plight of the farmers who produce the cocoa beans and more conscious of our buying habits. 

 

If you would like to support these farmers, then commit yourself to buying chocolate which is manufactured with fair-trade cocoa. Cadbury, for example, places a sticker at the back of its chocolate which says fair-trade cocoa. By purchasing this chocolate, you at least know the farmers will receive a decent wage for their hard work. So, buy fair-trade cocoa products, it’s the right thing to do!

 

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